Rather than be in the middle of “recovery summer,” the U.S. economy is still flat on its back. And it’s likely to get worse after the first of the year, thanks to the tax hikes the White House is planning.
Americans for Tax Reform, a nonprofit taxpayers’ interest group, reports that the Obama administration, with the support of congressional Democrats, “have said they want to raises taxes in the top two income tax rates in January 2011.” Under their plan, the group says, the current 33 percent rate will automatically rise to 36 percent and the 35 percent rate will increase to 39.6 percent, negatively affecting families and small business owners earning at least $200,000 per year.
The impact of these tax increases will be felt throughout the economy but particularly in the small business sector, where much of the nation’s job creation comes during an economic recovery. The reason for this, ATR says, is that:
According to a number of estimates, a majority of U.S. small business profits will face a tax rate hike under the Obama plan. Instead of putting profits back into the business in the form of equipment updates, new hires, and expansion, the small businessmen and women who make up the backbone of our economy will be called upon to underwrite, in the name of “raising taxes on the rich,” Washington’s addiction to overspending.